JIM LEHRER: Now managed health care and the poor, how hospitals and their patients are coping. Tom Bearden reports from Denver.
TOM BEARDEN: Dean Coleman has epilepsy he's trying to control, a job he's trying to keep, and no health insurance to help him do either. His employer of eight years doesn't offer the coverage, and his hourly wage of $8.75 is too much to qualify him for the government's Medicaid program and too little to pay for private insurance.
DOCTOR: (examining Coleman) Can I get you just to sit up--
TOM BEARDEN: Like millions of uninsured Americans Coleman must rely on what are known as safety net hospitals, hospitals that provide charity care. He's one of 12,000 people a year who get help at the University of Colorado Hospital's free clinic in Denver.
DOCTOR: (talking to Coleman) Where's your stomach bothering you?
TOM BEARDEN: Lately, Coleman's health has been failing, and he's been missing work. In one recent month he suffered 14 seizures. Doctors have started him on a different set of drugs.
DEAN COLEMAN: It's an ever-changing process of trying to find medications that'll treat me and get my seizures under control, which really hasn't worked very well. So it's an ongoing type thing. It's not like you can treat a cut or a wound and go away and it's gone.
TOM BEARDEN: But now Coleman has a new problem. At the beginning of this year the University of Colorado announced it must cut $8 million from its budget, forcing the free clinic to cut patient visits by half. Kelly Coyle is Coleman's social worker.
KELLY COYLE, Social Worker: The cuts are very scary for patients like Dean, because Dean is followed so closely here in our clinic. He's not going to be able to get a monthly follow-up appointment. It may take him two to three months to get a follow-up appointment, which means his seizures may get worse; he may go without medication or whatever, if we can't get him in here to be seen.
DEAN COLEMAN: It sent a shiver up my spine. If I couldn't come here, I'm sure my seizures would not be treated properly. It would cost quite a bit of money just to, just to keep going. I couldn't afford it.
TOM BEARDEN: Doctors are worried too. Dr. Bennett Parnes is a primary care physician.
DR. BENNETT PARNES: As a physician I feel I can't really tell people you stay, you go. That can be a form of abandonment, which is probably legally and definitely ethically undoable.
TOM BEARDEN: University hospital officials blame the deep cuts on increased competition from managed care companies. Under the managed care concept health insurance companies use their market clout to negotiate discounts with hospitals, both public and private. Traditionally the public safety net hospitals were able to pass along the cost of treating the uninsured to their paying customers. But now that subsidy is fast disappearing. Dennis Brimhall is president of the University of Colorado Hospital.
DENNIS BRIMHALL, President, University Hospital: We're having to give much deeper discounts for--to get the business that we--where we get paid by commercial insurers. That's just what's going on in health care today, just part of the business.
TOM BEARDEN: Brimhall says that while managed care may have saved society millions in medical costs, it tends to exclude those who can't afford insurance--the indigent. But Dr. William Roper, who worked in Denver's public hospital and is senior vice president of Prudential Health Care, says managed care did what it was asked to do.
DR. WILLIAM ROPER, Vice President, Prudential Health Care: I don't think managed care is the appropriate person to blame for the changes that are happening in America's health care system. We stepped up to the plate when the country said we have to have a way of providing health care more cost effectively than we have in the past, and we have met that challenge very successfully.
TOM BEARDEN: Since managed care providers have a responsibility to their customers to provide the least expensive, best quality of care, the question remains: Whose responsibility is it to provide for the indigent?
DOCTOR: I think we'll stay the course. We'll have you stay on that.
TOM BEARDEN: If Dean Coleman and others don't get the preventive care they need, they're liable to wind up in emergency rooms, where care is much more costly. CU's emergency room is seeing record numbers of uninsured patients. Dr. Jean Abbott has worked in the emergency room for the past 12 years. She thinks the increase may be due to dumping.
DR. JEAN ABBOTT, University Hospital: (talking to patient) When did this start?
TOM BEARDEN: She thinks that other hospitals in the area, trying desperately to contain their costs to meet managed care discounts, are dumping people that can't pay on the charity hospitals to avoid having to pay for their follow-up care. Dr. Abbott has been compiling a list of patients and their conditions that she suspects have been dumped.
DR. JEAN ABBOTT: Mandible fracture told to come and have her jaw wired here. Somebody who had extensor tendon lacerations, which could be very disabling and make your hand non-functional, who had the skin sutured but the extensor tendons referred here for later repair at University Hospital about a week later. Fetal demise, meaning that the pregnancy had gone wrong, and was sent here to have the fetus removed. It's a hard problem to get a handle on. It's very tragic for the patients. It's not legally wrong, but I certainly can't find it morally defensible.
TOM BEARDEN: Last year University Hospital provided $33 million in medical care for the indigent.
DENNIS BRIMHALL: There does come a point, which is unusual for us and counter-culture, where we have to say there's a limit to how much we can do. That's where the pain is today.
DOCTOR: (examining patient) I'm just going to gently press, and you tell me if it bothers you at all.
TOM BEARDEN: The CU hospital isn't the only safety net hospital in a jam. Diane Rowland, with the Kaiser Family Foundation, is a national expert on medical coverage for the poor.
DIANE ROWLAND, Kaiser Family Foundation: The social safety net is really shrinking. We've had a system that has allowed hidden costs to be covered for the uninsured, and that coverage is now eroding as those costs become squeezed by managed care. We're moving the system in a direction where if there isn't a crisis today, there's going to be a crisis tomorrow.
TOM BEARDEN: That crisis may come sooner, rather than later. The number of uninsured Americans is growing steadily, with 40 million across the nation and nearly 500,000 in Colorado. Experts attribute the rise to an increase in service jobs and small businesses that offer no employee benefits.
DENNIS BRIMHALL: It's an insatiable demand. If we open the door completely, we could fill up all the beds, all the clinic appointments, and provide care almost around the clock. And so the real question is you just have to draw a line somewhere.
DOCTOR: (talking to patient) So when you were in your car accident on the 9th--
TOM BEARDEN: Despite all their problems, safety net hospitals have had one steady source of income--people insured by Medicaid, the federally supported health insurance plan for the poor. Denver Health Medical Center provides the bulk of charity care in the city. Half of its cash flow comes from Medicaid patients, but now that funding source is in jeopardy. That's because managed care companies, which once shied away from these patients because the reimbursement rate was considered low, now see them as a steady source of income. Patricia Gabow is the CEO of Denver Health.
DR. PATRICIA GABOW, CEO, Denver Health: Five, ten years ago no one wanted Medicaid patients. So there was no competition for that funding stream which the safety net relied on very heavily. Now there's competition for those patients, so they're being pulled out of the safety net to other for-profit and not-for-profit HMO's.
TOM BEARDEN: Gabow is trying to convince Colorado legislators to assign the Medicaid population to hospitals which are currently providing the majority of charity care.
DR. PATRICIA GABOW: It sounds wonderful in America, which is a competitive, capitalistic, entrepreneurial society, to say let's put Medicaid business out to bid; let's get more competition in the Medicaid marketplace. But what happens is if you put the Medicaid piece out to bid and those patients get their care in a for-profit system when they have Medicaid, the minute they get off, they go back to the safety net. Then the safety net has lost the funding stream when they had a funding stream with them, and now they only have them when they have no funding stream. And it doesn't take a rocket scientist to see where that's going to get you in a year or two.
TOM BEARDEN: At the annual convention of the American Association of Health Plans Dr. Mark Smith, an expert in managed care, said public health and managed care have to work together.
DR. MARK SMITH, CEO, California Healthcare Foundation: Each one now needs the other. You are now entering new markets: Medicaid, Medicare, to some extent the indigent. These are markets different from the ones you know.
TOM BEARDEN: But he says people must be realistic about what managed care can do to solve the problems of the uninsured.
DR. MARK SMITH: I think the managed care companies have a role to play in paying for the uninsured, but I think it's probably as unrealistic to think that they're going to do that as to think that Safeway is going to solve the problem of hunger. That's not the business they're in. That's the business that the government is in, if not doing it, at least arranging for it to be done.
DR. WILLIAM ROPER: One of the solutions to the problem of the uninsured could well be saying, all managed care plans or all health insurers or all healthcare providers have to provide a portion of their services at a free or subsidized basis. That would be our participating in the solution to the problem.
TOM BEARDEN: The states have been actively seeking other solutions. Consideration is being given to everything from direct reimbursement to hospitals to finding new sources of funding for uninsured care. In Colorado, the legislature is considering a bill to provide health care to 40,000 of the state's 150,000 uninsured children. Nationally, President Clinton has pledged to provide insurance for poor children. For Dean Coleman, who is trying hard to keep his job, the government's role in providing health coverage only makes sense.
DEAN COLEMAN: In order to have a healthy nation, in order to have a healthy society, working at its best and doing its best, we all have to be healthy. I mean, what good am I going to be if I'm on my back and can't work? The federal government loves me to work and pay taxes and to be a supporting individual. I can't do that if I'm--if I'm sick.
TOM BEARDEN: But government's role in health care coverage remains controversial as taxpayers continue to pressure politicians to reduce spending.